Ethereum’s Triumphant Return

Ethereum, a leading blockchain platform, soared to a new record price on Friday. This milestone, occurring nearly four years after its prior peak, is attributed to significant growth in ETH-backed treasuries, a more favorable regulatory climate, and heightened interest from traditional financial sectors.

Data indicates that Ethereum, the second largest cryptocurrency by market capitalization, experienced a 15% surge in the last 24 hours, reaching $4,879. This surpasses its prior record of $4,878 achieved in November 2021, according to CoinGecko’s tracking.

Over the past couple of months, Ethereum’s value has more than doubled, exceeding even Bitcoin’s performance, fueled by investor interest in exchange-traded funds. Although Ethereum approached a new record on August 14th, its price declined alongside the wider market, falling below $4,100 earlier in the week.

However, on Friday, cryptocurrency values broadly increased following comments by Federal Reserve Chair Jerome Powell, which suggested the potential for future interest rate reductions. Ethereum’s price jumped approximately 8% within an hour of these remarks, and has continued upward since.

Brian Huang, co-founder of the Glider on-chain automation platform, remarked, “It’s finally Ethereum’s time to excel. The confluence of substantial ETH ETF inflows, the introduction of extensive ETH digital asset treasuries, alongside ecosystem successes such as Circle and Bullish IPOs, and the executive order permitting digital assets in 401(k)s, have all contributed.” He added, “Jerome Powell’s dovish statement hinting at rate cuts was the final catalyst Ethereum needed.”

Huang also observed that the sentiment surrounding Ethereum is strong, with Layer-2s like Base continuing to expand, and Ethereum still having nine times the DeFi liquidity of the second contender, Solana. He stated, “We’re still in the early stages for Ethereum, the world’s global settlement layer.”

This surge in Ethereum’s value can be partially attributed to the increasing demand for ETFs. Last week, U.S. spot Ethereum ETFs attracted more than $1 billion in inflows in a single day for the first time since their launch in July 2024. Ethereum funds have also demonstrated faster gains compared to Bitcoin ETFs, although they have also seen more rapid outflows during down periods.

These gains have coincided with the emergence of companies prioritizing Ethereum accumulation. Recently, Bitcoin miner BitMine Immersion has increased its holdings to over $7 billion, and SharpLink Gaming, transitioning from online marketing, has amassed over $3.5 billion worth of Ethereum.

These companies are following a similar path to the Bitcoin treasury company Strategy (formerly MicroStrategy), which began purchasing Bitcoin in 2020 to boost its stock value. This move inspired numerous followers who have since expanded into other assets, including Ethereum, Solana, and BNB.

“Ethereum has a number of positive factors driving it,” explained Strahinja Savic, Head of Data and Analytics at FRNT Financial, a financial services and advisory company specializing in crypto. “Record ETH ETF inflows and aggressive buying from treasury companies are providing significant tangible demand.”

He continued, “Moreover, Ethereum is central to key themes that are attracting the attention of traditional financial institutions, such as the tokenization of traditional assets and stablecoins. These represent significant economic trends, and Ethereum is emerging as a leading platform to accommodate this new capital and interest.”

Ethereum also benefited this month from the SEC’s clarification regarding staking guidance, an issue long sought by Ethereum users.

In a shift from previous restrictive policies, the regulator stated that liquid staking services could distribute staking rewards to customers without registering with the agency.

Furthermore, last month’s passage of the GENIUS Act has improved Ethereum’s potential. This legislation establishes a regulatory framework in the U.S. for issuing stablecoins. Developers of these projects predominantly utilize the Ethereum blockchain for their projects. The majority of stablecoins are pegged to the U.S. dollar’s value.

Samir Kerbage, Chief Investment Officer at crypto asset manager Hashdex, stated, “Ethereum’s new record high is a clear indication of investor demand beyond just Bitcoin. As Ethereum and other smart contract platforms provide the foundational infrastructure for many of crypto’s most established applications, including stablecoins and tokenization, we anticipate continued robust demand for this emerging asset class.”

The likelihood that Ethereum will surpass $5,000 this year has increased significantly in the past day on Myriad Markets. The prediction market now indicates an approximately 85% chance that the token will reach that milestone in 2025.

(Disclosure: Myriad is a prediction market and engagement platform developed by Dastan, parent company of an editorially independent Decrypt.)

In a report released last week, U.K. bank Standard Chartered increased its Ethereum price target to $25,000 by 2028, a notable shift from previous forecasts made earlier in the year that suggested a structural decline for the cryptocurrency.

Geoff Kendrick, the bank’s Global Head of Digital Assets Research, wrote “We are raising our price predictions, given the markedly improved environment for ETH in recent months.”

Editor’s note: This article was updated after initial publication to incorporate further commentary.